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Noncompete agreements

Negotiate job mobility, lock in security

by on
in Employment Law,Human Resources,Leaders & Managers,Management Training,Salary Negotiating,Workplace Communication

Executives used to sign “employment contracts” that bound them to an employer for a set number of years. Today, with company layoffs sometimes striking upper management, expansive “employment agreements” assign more rights to both employer and employee as never before.

While employment agreements vary and everything’s negotiable, most specify termination severance packages, sign-on bonuses and employment guarantees for set periods. In exchange for these goodies, however, managers usually must accept a “noncompete” clause that may restrict their mobility when seeking other employment.

A noncompete agreement prevents you from working for a direct competitor in the event that you no longer work for your current employer, whether you quit, are fired or are laid off. While the agreement may run for only six months, it still can ruin your job hunt. An increasing number of employers are enforcing these agreements and are even resorting to legal action against former employees who violate the terms of the deal.

Here are some negotiating tips to consider before you sign a noncompete agreement:

Reason for leaving. Your firm may present you with a noncompete clause that is valid whether you quit or not. See if you can limit it to situations where you choose to resign.

If you leave voluntarily, an employer has a justifiable concern about you moving to a competitor. But if you’re laid off or fired, your employer shouldn’t mind if you get another job in your field.

Define the competition. Depending on your industry or technical expertise, you may be able to work for a competing company in another capacity. Most employers worry that an ex-employee will reveal trade secrets, but you can address that issue by negotiating the freedom to join a competitor in an entirely different department or subsidiary.

Insist on concessions. Employers do not expect you to blindly sign whatever they toss in your face. If you’re already working at a company and you’re promoted into a position where you’re asked to sign a noncompete agreement, consider it an opportunity to seek a guarantee of your job or pay level for longer term limits or to negotiate a higher salary or more perks.

Remember: Employers understand that noncompete agreements can severely cripple your ability to safeguard your career, so they should make reasonable attempts to show good faith in keeping you happy where you are.

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